Health insurance in America has changed over the past few years. Since President Obama signed into law the Affordable Care Act, insurance companies have had to adjust their policies and their approach to consumers in terms of offering benefits. The new law provides better protections and safeguards while making sure that people get the medical services they need. If you buy a new major medical plan today, you’re guaranteed coverage for ten essential benefits including things like outpatient care, prescription drugs and pediatric services.
The law’s stipulations, however, only apply to major medical plans. If you’ve been researching health insurance options, then you may have been presented with the choice to buy “short-term health plans” or STHPs. This type of insurance acts as a temporary placeholder until you can find major medical insurance.
For people with gaps in their coverage due to new jobs, college graduation or other short-term situations, STHPs offer sufficient coverage in the meantime. The relatively low cost of short-term plans makes them an attractive buy for people with limited incomes. In fact, you may be tempted to forgo major medical insurance altogether in favor of short-term coverage. Before you make that decision, know the risks of skipping out on a traditional policy.
Tax Penalties under the ACA
The Affordable Care Act sets out new guidelines for insurers and helps people gain affordable coverage for essential medical care. In order to work effectively, the law requires participation from every eligible American citizen, which means just about everybody. The IRS will impose a tax on your annual tax filing if you do not sign up for a qualifying medical plan. Signing up for short-term health insurance does not fulfill the government’s requirement for minimum essential coverage.
Temporary policies don’t have to cover the ten essential services set forth by the ACA. If you apply for a short-term plan, the insurance company can deny coverage based on illness or pre-existing conditions. You can also be dropped from the plan, and you waive a lot of the rights that people with major medical plans enjoy today.
Most important, your short-term policy does not protect you against the yearly tax penalty for skipping out on health insurance. This year, the taxes went into effect, and people without coverage in 2014 had to pay the greater of $95 or 1 percent of their taxable income to the IRS on top of anything else they owed. When you file your 2015 federal income taxes, you’ll pay 2 percent or $325, whichever is greater if you were uninsured for the 2015 calendar year. The fee increases every year. On top of the fact that your short-term policy won’t cover many of the basic services that a major medical plan covers, you’ll owe the government extra money for failing to buy qualifying health insurance.
Knowing the Facts
In short, you will be taxed the ACA penalty fee for non-compliance even if you sign up for a short-term health plan. This might sound straightforward, but some people remain confused about the new law partially due to misleading claims made by insurance companies that offer STHPs. According to a survey conducted by eHealth and reported on by Bloomberg Business, about 20 percent of those who responded thought that an STHP would meet the ACA requirement for coverage. The survey also found that another 64 percent of respondents didn’t know for sure.
No matter how great the short-term policy seems, you need to know that these plans will not prevent you from getting taxed under the ACA. Temporary policies come in handy when you need limited coverage for a short period, but they’re not created to replace major medical insurance. Before you sign up, read the fine print carefully and understand the caveats.
If you’ve been searching for ways to meet the new healthcare law requirements, then you might be tempted to enroll in short-term insurance, also referred to as short-term health plans or STHPs. Before you sign up for temporary coverage, you should take a closer look at what these policies have to offer. Short-term insurance makes a great temporary solution to the problem of not having immediate coverage, but they don’t always fit the bill when it comes to healthcare.
How Does STHP Work?
Like regular insurance, short-term health plans cover a few basic medical services when they come up. Doctor’s visits, emergency care and surgeries are all usually covered by short-term insurance policies. If you need to see a doctor for a cold, then an STHP will work. However, temporary insurance doesn’t cover a lot of other services that regular plans now do under the Affordable Care Act. Prescription drugs, maternity care and even preventive services like routine wellness visits are not typically covered under short-term policies. If you need extensive care or suffer from a pre-existing condition, a short-term plan won’t work for you.
Short-term plans cost much less than regular insurance because they cover less medical care and are not designed to be used like regular insurance. According to a report on short-term coverage costs issued by eHealth.com, individuals paid about $67 per month for STHPs in 2011. Families paid around $153. Temporary insurance is also easy to get and flexible. Most companies offer a range of contracts lasting from 30 days to a full year.
What STHPs Don’t Cover
Under the Affordable Care Act, Americans now have more rights and protections when it comes to health insurance. With regular insurance, you’ll have access to regular preventive checkups, prescription drugs, rehabilitative care, pediatric care and other essential benefits mandated by the law. Short-term health plans do not qualify as compliant coverage under the new law because they do not have to offer these benefits. In fact, STHP insurers can still deny coverage to people with pre-existing conditions and can set lifetime caps on how much they’ll pay in benefits. For a full list of the downsides of STHPs, you can check out our pros and cons list.
Who Benefits from STHPs?
You might wonder why anyone would bother enrolling in an STHP if the plans are not comprehensive enough to cover all of your medical needs, but the primary purpose of temporary insurance is to bridge the gap between coverage periods. A 28-year-old freelance photographer, for instance, might want her own policy because she lives and works on her own and can’t afford any other insurance right now. Instead of buying a costly regular plan or a cheaper catastrophic plan on the marketplace, she could pay for short-term insurance until she grows her business or gets hired as a regular employee somewhere. Short-term health plans aren’t just for the young. Below, we list some people and situations that might benefit from STHPs:
- You’re between jobs, but you don’t want to enroll in the available COBRA coverage.
- You’ve just graduated college, and you may get a job with benefits within the next few months.
- You start a new job that offers insurance, but coverage doesn’t begin until you’re with the company for three months. You need a policy in place during the interim.
Short-term health insurance doesn’t work for everyone, but there are certain types of people that would benefit from temporary coverage. Most major medical carriers offer some type of short-term insurance policy, so you have options for getting coverage that meets your short-term needs.
If you’ve been shopping for health insurance, then you’ve probably come across “short-term health plans” or STHPs. Short-term insurance policies are touted by most health insurance companies as good alternatives to traditional coverage, but these plans come with a few caveats to keep in mind. Before you decide to skip major medical coverage in favor of temporary coverage, understand a few basic facts about short-term health plans.
What STHPs Cover
Many short-term health plans cover the same types of medical treatments that major medical insurance covers. If you fall and break your leg, for example, STHPs cover emergency trips to the hospital and follow-up care with your doctor. They also cover doctor’s visits for routine complaints such as colds, the flu, and regular aches and pains. If you need surgery, most short-term insurance plans will cover a portion of the costs. Temporary insurance works similarly to major medical insurance in that your insurer will cover a percentage of your medical costs up to a certain point.
Exclusions and Exceptions
The downside is that STHPs don’t always cover medical services that you might take for granted. Your annual physical may not be covered, for instance, or you might have to cover the total cost of a pregnancy out-of-pocket. Under the Affordable Care Act, major medical plans have to cover ten essential benefits, which include things like rehabilitative care, prescription drugs and hospitalization. Because short-term plans don’t have to meet the requirements of the law, your temporary coverage may not cover these or other basic services.
If you have a pre-existing medical condition or are sick when you apply for a short-term policy, the insurance company can reject your application. The ACA forbids insurers from doing this with major medical plans, but again, short-term policies are exempt from the terms of the law. Insurance providers hold most of the cards when it comes to STHPs, which means that their definition of a “pre-existing condition” may extend to situations like pregnancy. Before you sign up for a policy, check the terms of the contract carefully to make sure you’re covered for the things you need. Most people with pre-existing conditions aren’t eligible for short-term policies.
Flexibility in Coverage
Despite its limitations, temporary health insurance serves a purpose for certain people. If you graduate from college, move out from your parents’ home or find a new job, then short-term health insurance can bridge the gap in coverage until your major medical insurance begins. Volunteer workers who need proof of insurance while they’re out of the country may also take advantage of the flexibility that comes with STHPs.
Because these plans range from 30-day policies to yearlong contracts, you can choose the amount of coverage you need without getting stuck. Many jobs, for example, require employees to work for a certain period before their health insurance kicks in. With short-term insurance, you can stay protected while you’re waiting for a new policy to start.
You should note that STHPs don’t offer automatic renewal at the end of the contract. If you sign up for a plan and like it, then you’ll have to reapply for that plan. The insurance company is under no obligation to renew your policy. Insurers also reserve the right to drop enrollees from their policies, which is a practice that has been banned under the ACA for major medical plans.
One of the most convenient aspects of STHPs is that they can be purchased completely online without the lengthy application process typical of major medical plans. Most people get approved with a few minutes, and coverage starts as soon as the next day for people who pay their premiums when they sign up. Fast approval, minimal wait time and immediate use make attractive incentives for many enrollees.
Premiums and Out-of-Pocket Costs
Temporary health insurance policies cost about half as much as major medical plans. They aren’t designed to act as long-term coverage. Instead, they act as buffers against unexpected medical costs while you’re looking for a new job or waiting for a work-based policy to start. Low monthly premiums make STHPs a viable option for some, but you should keep in mind that a lower monthly premium usually indicates a higher overall deductible. This concept holds true with both short-term and major medical insurance plans.
How much you pay per month for a short-term policy depends on your medical needs and the coverage you choose. Health insurance website eHealth.com offers policies for less than a dollar per day for individuals, and many companies offer similarly affordable options for basic coverage.
Unfortunately, you might pay much more in out-of-pocket costs with a temporary plan. Many insurers set caps on how much they’ll pay out in claims with short-term policies. Plus, you might have to pick up a portion of the tab for your medical expenses even after you meet your deductible, which is often higher with temporary plans that it is with major medical insurance.
STHPs and the Affordable Care Act
The Affordable Care Act requires eligible Americans to have minimum essential health coverage, but short-term health plans don’t qualify. These policies don’t have to offer the same benefits or protections that the law now requires of major medical plans, and if you choose an STHP over major medical insurance, then you’ll be subject to the non-compliance tax when you file your return each year. Enrolling in short-term insurance can be a great way to protect yourself and your loved ones during temporary gaps in coverage, but there are some downsides to consider before signing up for a policy.
When it comes to short-term health insurance plans or STHPs, insurance professionals agree that there are certain advantages to buying temporary coverage. They also usually note that STHPs come with some important hidden strings. Temporary insurance makes a great choice for some, but you should note the drawbacks before signing up for a policy.
- Pro: STHPs typically cost about half as much as major medical plans.
- Con: Your out-of-pocket expenses may be higher with short-term insurance.
How much you pay for insurance will always depend on your specific situation and plan type, but in general, short-term health insurance costs much less in monthly premiums than major medical insurance. There are a couple of reasons for this. First, STHPs cover fewer medical services. You can see a doctor for a stomachache, but you may not be able to go in for routine checkups or maternity care. Also, short-term insurance demands higher deductibles, which make your premiums significantly lower. Families pay an average of around $150 each month for short-term coverage while individuals might pay around $70 per month.
On the downside, temporary coverage might strain your wallet when it comes to out-of-pocket costs. Because of the low premiums, insurers set much higher deductibles for STHPs. You might have to reach a cap of $2,000 or more before the company pays its share, and that share may not be 100 percent. Not only could you have to pay out-of-pocket for a 20-minute doctor’s visit, but you might also have to foot a portion of the bill even after you reach your deductible. STHPs also usually don’t set out-of-pocket maximums unlike major medical plans.
- Pro: You can sign up for an STHP any time, and coverage starts immediately.
- Con: Temporary coverage isn’t automatically renewable, and you can lose it.
One of the biggest selling points of short-term insurance plans is that you can sign up for them whenever you need, and your coverage typically starts the next day as long as you’ve paid for it. Major medical insurance can require lengthy wait periods, which is one reason why people sign up for STHPs in the first place. They need insurance to bridge the gap until their regular plan kicks in. With STHPs, you won’t have to worry about getting in an accident the day after you sign up because your plan will already be in place.
Unfortunately, flexibility works both ways. Insurers have a right to drop you from a policy for reasons they deem necessary, and you can’t renew STHPs the same way you might renew major medical coverage. If you like your plan, then once the contract ends, you’ll have to sign up for the same policy and hope that the insurance company accepts your application. There’s no automatic renewal for temporary policies.
- Pro: Short-term insurance works well for people who are young or relatively healthy.
- Con: People with pre-existing conditions won’t get coverage.
There are a few good reasons to buy short-term coverage. If you’re between jobs, waiting on employer-sponsored coverage to take effect, recently graduated or trying to apply for volunteer work that requires proof of insurance, short-term policies make sense. They offer convenient and affordable protection in the meantime. Young and relatively healthy people usually make the best candidates for STHPs because they don’t see doctors very often.
Young or not, people with pre-existing conditions will most likely not find a company willing to sell them a short-term policy. Unlike with major medical insurance, STHPs do not have to accept anyone who applies, and insurance companies can still deny coverage to those with pre-existing medical conditions. Keep in mind that “pre-existing” is a subjective term in the sense that insurers might consider something as short-term as pregnancy a pre-existing condition.
- Pro: Buying short-term insurance keeps you covered in a pinch.
- Con: STHPs do not comply with the Affordable Care Act.
There may be other times when short-term coverage meets your needs. Most people adjust their health insurance at least a few times during their lifetime as family needs change, and major medical insurance usually requires a waiting period for full coverage to take effect. During the gap, you’ll need something to help you out if the unexpected occurs. Car accidents, bouts of the flu and other medical situations will be covered by short-term health insurance until you can enroll in major medical coverage.
The biggest drawback right now with STHPs is that they do not qualify as minimum essential coverage under the Affordable Care Act. You have rights and responsibilities set forth by the ACA, and short-term coverage doesn’t protect you against penalties for not having insurance. It also doesn’t guarantee coverage for things like preventive visits or mental health care. Signing up for an STHP might give you peace of mind while you wait for major medical to take effect, but it’s not going to keep the government off your back when you have to pay the fine for non-compliance.
Since the Affordable Care Act took effect in 2013, a lot of consumers have had legitimate questions about the logistics of the new law. Most people in America had some type of coverage before the law was signed in 2010, but the ACA wasn’t created solely to offer options to the uninsured. Its secondary goal was to increase consumer protections and hold insurers accountable for their actions.
To work effectively, the ACA depends primarily on taxpayer funding, which means that those who don’t buy health insurance will have to pay up during tax time each year. In an effort to avoid this penalty tax, some people have signed up for cheaper short-term health plans or STHPs. Offered by many major medical insurers, temporary health plans may lull some into a false sense of security. There are situations in which short-term insurance fulfills a need, but you need to know that these plans do not comply with the new healthcare law’s requirements.
Bridging the Gap
Short-term health plans are designed to bridge the gap between coverage periods. If you get a new job, for instance, and you’re waiting on a new work-based policy to kick in, then you might sign up for short-term health insurance to make sure you can see a doctor if you get sick in the meantime. Recent college graduates, young adults who age out of their parents’ coverage and people who need proof of insurance for travel or charity work may also enroll in STHPs until they find long-term coverage. In addition, people who missed the open enrollment period for the ACA may opt for short-term coverage until the next period starts.
Rights and Protections under the ACA
Under the Affordable Care Act, you can expect better protections against unethical or unfair insurance practices. You’re also guaranteed more rights and better coverage. Things like wellness checks with your doctor, routine cancer screenings, children’s health care, mental health services, prescription drugs and hospitalization are all covered under new plans thanks to the “ten essential benefits” provision of the ACA. Insurance companies can’t deny coverage to people with pre-existing conditions, and you won’t be dropped from your policy without a good reason and without warning. Unfortunately, these and other protections only apply to major medical insurance.
How STHPs Differ from Major Medical Insurance
Aside from the length of the policies, there are a few important differences between short-term health plans and major medical insurance. For starters, short-term plans have cheaper premiums but higher deductibles and increased out-of-pocket costs. Major medical plans require an in-depth enrollment process whereas STHPs take a few minutes. If you enroll in a short-term plan, you may not be able to re-enroll in that same plan when your coverage ends. You can also be denied coverage based on a pre-existing condition. On the other hand, you usually have to sign up for major medical insurance during open enrollment. With STHPs, you can enroll anytime.
A Plan that Works
If you don’t enroll in a major medical insurance plan during the open enrollment period, then you’ll be charged the penalty tax by the IRS when you file your taxes each year. Unless you qualify for an exemption or a special enrollment period, you’re out of luck. However, even though short-term health plans don’t qualify as minimum essential coverage under the ACA, they can act as filler until the next open enrollment period starts. You’ll still be charged the tax for every month that you lack coverage, but at least you’ll have some health insurance available just in case.
As the largest single health insurance carrier in America, UnitedHealth Group offers a number of policies covering every aspect of health care. The company operates under separate divisions for different types of insurance. If you’re searching for a short-term health plan, also called an STHP or short-term insurance, then you’ll be looking under UnitedHealth One, which is United’s subsidiary company that handles voluntary benefits, pet coverage and other similar insurance products. Short-term health insurance gives you temporary benefits while you’re without other options or waiting for a major medical plan to start.
UnitedHealth One offers four nationwide short-term health insurance policies and one temporary medical plan reserved for residents of Kentucky, South Carolina and Wyoming. The type of plan you pick will depend on your medical needs. As with major medical insurance, short-term policies cover things like doctor’s visits and emergency care. They may not cover preventive care, however, and many STHPs don’t provide for services related to maternity or substance abuse. With UnitedHealth One, you can choose from one of the following options:
- Short Term Medical Value: This lower cost option allows enrollees to get temporary protection without the price tag of more comprehensive policies. The company will pay 70 percent of eligible expenses after you meet a deductible, which ranges from $1,000 to $10,000. Once you reach a maximum out-of-pocket cap, United will cover the remaining expenses at 100 percent.
- Short Term Medical Copay: The copay plan under UnitedHealth includes predictable copays and set amounts for coinsurance. For example, doctor’s visits will cost $50 out of pocket, and the plan does offer prescription coverage. Out-of-pocket maximums are higher with this plan, but the company pays 80 percent of eligible expenses once you reach your deductible.
- Short Term Medical Plus: Medical Plus plans give members peace of mind when it comes to deductibles and out-of-pocket expenses. United pays 80 percent of expenses after you reach your deductible, and there’s a $10,000 maximum amount that you’ll have to pay before the company will cover costs at 100 percent.
- Short Term Medical Plus Elite: The difference between Medical Plus and Medical Plus Elite comes in the lifetime payout amount. Under the Plus plan, United will only pay benefits up to a million dollars over the lifetime of your policy. With Plus Elite, the company adds $500,000 to this maximum so that you have a $1.5 million payout maximum.
- Short Term Medical: This plan is only available to you if you live in South Carolina, Wyoming or Kentucky. Designed for people “in transition” according to United’s website, the plan includes features such as lower deductibles, extensions for people who get confined as inpatients, and limited time frames up to six months.
Four of the above plans are available to most people living throughout the United States, but policies may vary by state and availability. You should also keep in mind that short-term plans don’t qualify as minimum essential coverage under the Affordable Care Act. This means that you may not receive the same benefits as you would under a major medical plan, and the government will assess a tax penalty against you if you choose an STHP over a regular policy. Make sure you understand the full picture before signing up for a plan.
Insurance companies that offer short-term health insurance policies often tout low premiums as one of the top selling points. They aren’t wrong. One of the advantages of short-term health plans or STHPs is that they cost much less per month that major medical insurance does. For the average individual or family with limited income, temporary coverage makes economic sense in the short term. However, premium costs are only the tip of the iceberg when it comes to health insurance. Out-of-pocket spending, deductibles and insurer payout amounts affect how beneficial a policy will be. Let’s take a look at how much an STHP might cost you.
Average Costs Nationwide
In 2013, eHealth.com released a report summarizing a study that it had conducted on short-term health insurance costs in 2012. On average, individuals paid around $69 for an STHP while families paid about $160 per month in premiums. Your situation might vary. Like all insurance policies, exact figures are hard to determine because each person and family needs something different from a policy. In general, however, short-term policies cost much less up front than major medical plans. According to the Kaiser Family Foundation, individual premiums for major medical insurance cost around $226 per month in 2012, which is a significant increase over STHPs.
On the other hand, short-term health plans often come with higher deductibles and fewer benefits. Insurers can also set low lifetime payout caps, and they don’t have to renew your policy when your contract ends. The marketplaces under the Affordable Care Act offer subsidies to low- and medium-income families. Subsidies may make some major medical plans more affordable than STHPs in the long run.
Penalty Fees under the Affordable Care Act
Short-term health insurance policies don’t count as minimum essential coverage under the Affordable Care Act. If you don’t sign up for major medical insurance and you don’t qualify for an exemption or special enrollment period, then you’re subject to the penalty fine when you file your taxes each year. STHPs can’t prevent this from happening because they’re not qualified health plans under the terms of the ACA. In a post-ACA country, the cost of buying health insurance includes the cost of penalty fees.
When you file your taxes in 2016, you’ll pay a higher penalty rate, which is the greater of 2 percent of your taxable income or $325. The money you save with a short-term health plan in lieu of a major medical plan might be compromised by the taxes you owe. Before you decide to skip major medical in favor of STHPs as your primary coverage, know that you’ll be risking hefty fees in the future.
Maximizing the Value of STHPs
Despite the ACA fees, buying a short-term policy is still a better option than avoiding insurance altogether. The low premium costs associated with STHPs could make up for just one doctor’s visit without insurance. Medical providers often give discounts to patients who pay without insurance, but the discounts are negligible in most cases. With insurance, a trip to the emergency room might cost $100. That same trip without insurance could cost thousands. Having some kind of insurance available will save you money even with the penalty tax attached.
To maximize the value of your short-term policy, use it for how it’s intended. If you get a sore throat or break your leg, then see the appropriate provider. Because temporary policies have higher deductibles than some major medical plans, choose your doctor’s visits wisely.
Short-term plans act as safety nets while you’re waiting for major medical coverage, so use them when you need a temporary placeholder. These plans also allow you to find out what kind of coverage you need for your family if you’re not quite sure. When the open enrollment for major medical insurance starts up again at the end of the year, check out your options on the marketplace to see if you can get financial assistance.
LifeMap started as a subsidiary of a major medical provider in 1964 and has evolved into a company that services thousands of people nationwide. Offering products such as short-term medical, dental and vision, and job-based coverage, LifeMap believes in helping its members through difficult transition periods. The company also offers discount products and services on things like alternative medicine, pet care, weight management and child health. Short-term health plans or STHPs give you flexibility and peace of mind while you’re between major medical coverage. If you need options for temporary coverage, LifeMap provides customizable choices.
All short-term medical plans offered by LifeMap include the same benefits, but there are options to personalize plans so that they fit your needs and budget. Members choose the length of coverage, the amount of the deductibles and how much they pay in coinsurance. Rates and other specific features will vary by location. For example, Idaho residents are limited to one policy per 12-month period while residents of all other states can purchase two plans per 12-month period. In Oregon and Washington, the term “spouse” includes a primary insured member’s husband, wife or domestic partner. LifeMap offers the following covered benefits with all of its STHPs:
- Trips to the emergency room
- Ambulatory or outpatient care
- Hospitalization and nurse care
- Doctor’s visits for unexpected illness or injury
- Lab testing and X-rays
- Certain cancer screenings for men and women
- Limited therapy sessions related to physical conditions
- Limited home health care services
- Rental services for durable medical equipment
- Prosthetic placements “required for functional purposes”
- Casts and necessary equipment for recovery after surgery
- Organ transplants
LifeMap offers an extensive list of benefits, but you’ll note that there are some gaps in coverage that major medical plans typically cover. Things like routine doctor’s visits, preventive care and screenings, rehabilitation for drug or alcohol abuse, and maternity care are excluded from the policy. The company excludes these and other treatments to keep costs down. In addition, none of LifeMap’s policies cover pre-existing conditions. Under the Affordable Care Act, major medical providers are required to offer a comprehensive set of covered benefits, but STHPs don’t have to comply with this rule because they don’t qualify as major medical coverage.
If you sign up for a short-term plan, understand that you won’t be meeting the ACA requirement of minimum essential coverage. When you file your taxes each year, the IRS will assess a penalty fee against you if you don’t have major medical coverage under a qualifying health plan. Still, short-term medical allows you to plan for the unexpected while you’re in transition. Whether you’re waiting for major medical to kick in at work or you’ve just moved out of your parents’ house and need temporary coverage, STHPs offer a good solution for the interim.
Operating under the direction of HCC Insurance Holdings, Inc., HCC Medical Insurance Services, LLC offers a wide array of insurance products primarily to travelers. The company also delivers health and life insurance policies to people living in more than 130 countries. Founded in 1998 as one of the pioneers of delivering Internet-based insurance products, HCCMIS believes in providing customers with the ability to purchase products, change their policies and maintain their coverage entirely online. If you need a short-term health policy or STHP, then HCCMIS can afford you several customizable options.
HCC Medical Insurance Service’s STHPs
HCCMIS promotes itself as a company dedicated to travelers, but the company also delivers short-term health insurance products to families and individuals younger than 65. Members can choose their level of coverage, the amount of their deductible, how much they pay in coinsurance and other factors that address their needs. HCCMIS offers short-term insurance products to people nationwide with the exception of those living in Utah, Minnesota, Vermont, New York, Massachusetts and New Jersey.
Because individual plans may vary by need and location, the company does not provide an outline of the benefits included. However, there are some general features available to those who take advantage of HCCMIS’s temporary medical plans. Customers enjoy:
- A fast sign-up process
- Not having to pay an application fee
- Access to any provider without out-of-network fees
- Low-cost copays at urgent care centers
- A 10-day trial period with money-back guarantee
Keep in mind that most STHPs include coverage for doctor’s visits due to illness, emergency room visits, ambulance transport and other unexpected medical expenses because they’re designed to fill a short-term need in case something happens. Many STHPs do not cover routine provider visits, pre-existing conditions or the 10 essential benefits mandated by the Affordable Care Act.
Under the ACA, insurance companies are also prohibited from denying coverage to those with pre-existing conditions. Unfortunately, short-term insurance plans do not have to adhere to the ACA’s requirements because these plans are not considered qualified health plans under the new law. If you choose to enroll in an STHP in lieu of a major medical plan, then you’ll be charged a penalty fee by the IRS when you file your taxes. Temporary coverage offers you peace of mind during transitional periods in your life, but it’s not supposed to act as primary or long-term insurance. Understand the risks before signing up.
IHC Health Solutions operates a network of insurance carriers that offer the following products: individual and group dental, prescription cards, overseas travel medical plans and short-term insurance. The company provides plans nationwide and promotes itself as a business that “specializes in developing, marketing and administering affordable niche health insurance products” according to its website. Short-term health plans or STHPs help people who need temporary coverage. Recent college graduates, for example, might sign up for a short-term policy while they search for a job that offers major medical coverage. If you need temporary coverage for this or any other reason, then IHC Health Solutions may offer the product you seek.
IHC Health Solution’s STHPs
Depending on where you live, you can enroll in an STHP from IHC Health Solutions that lasts from 30 days to 364 days. Many insurers only offer short-term plans up to six months. The company’s products are underwritten by Standard Security Life Insurance Company of New York, which is a member of the overarching IHC Group. You can choose from two plans with different levels of coverage as described below:
- Secure STM: The Secure STM plan includes a $2 million payout maximum per covered person over the course of the policy. That means that the company will pay up to that amount for your benefits. You can choose any provider with this plan, and you have the option to re-apply for coverage as many times as you want after each contract ends. Members can pay monthly or all at once, and there’s a discount for paying the total up front.
- Secure Lite STM: With the Secure Lite STM, members choose a deductible ranging from $500 to $5,000 and are limited to four doctor’s visits per coverage period at $25 per visit. You can still choose any doctor or hospital with this plan. Both the Secure Lite STM and Secure STM plans offer coverage up until age 65.
It’s important to note that IHC Health Solution calls its plans short-term “major medical insurance,” but this phrase is slightly misleading. Major medical insurance typically refers to insurance plans that cover a full range of medical benefits. Under the Affordable Care Act, major medical plans must offer 10 essential benefits and provide for certain consumer protections. Insurers also can’t deny coverage to those with pre-existing conditions with major medical insurance.
Short-term health plans do not qualify as major medical or qualifying health plans under the ACA. If you enroll in an STHP instead of a major medical plan, then you need to understand that you will owe the government a shared responsibility fee when you file your taxes each year. Temporary coverage can be a great solution while you’re in transition or waiting for the next open enrollment period to begin for major medical coverage, but it’s not a good choice for primary, long-term coverage.